Petition for Writ of Certiorari — Robbins v. United States, 119 S. Ct. 2400 (1999) (No. 98-1819)

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SUPREME COURT OF THE UNITED STATES

October Term, 1998

NANCY A. ROBBINS AND EDWARD W. ROBBINS.

Petitioners.

UNITED STATES,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FEDERAL CIRCUIT

CORRECTED PETITION FOR A WRIT OF CERTIORARI

Barry C. Hodge

Counsel of Record

Paul J. Harris

National Property Rights Center

11521-E Midlothian Turnpike

Richmond, VA 23235

(804) 378-1145

Attorneys for Petitioners

QUESTION PRESENTED

In a takings case, does “economic futility” constitute a

recognizable exception to the ripeness doctrine?

TABLE OF CONTENTS

QUESTION PRESENTED ........ccccceceesceeceenerecensnenerseceeeesereneese i

TABLE OF CONTENTS .......ccccccccccccsecccceececcensesescesssnceseseeees di

TABLE OF AUTHORITIEG. ...........cccccscccccccccccceceserscecccecsevecs iii

OPINIONS AND ORDERS BELOW, .........-ccceccesccceeeeeeeseeeeeeeees l

STATEMENT OF JURISDICTION ........cccccccccsccccecccccceceesecesees I

CONSTITUTIONAL PROVISIONS INVOLVED ..........0ceeeseeeeees l

STATEMENT OF THE CASE .........ccccccccccccccecccccceesevesesscescsees l

REASONS FOR GRANTING THE WRIT..........:.ceeceeeeeeeeeeeeseres 6

I. THE PETITION SHOULD BE GRANTED BECAUSE THE

TRIAL COURT’S OPINION CONFLICTS WITH THIS COURT'S

PRIOR RULINGS REGARDING RIPENESS ..........:ceceeeeeeeeeeeees 6

Il. THE PETITION SHOULD BE GRANTED BECAUSE THE

TRIAL COURT WAS PLAINLY WRONG IN FAILING TO

PROPERLY CONSIDER AFFIDAVITS OF REAL ESTATE

EXPERTS UNEQUIVOCALLY SHOWING ROBBINS’ LAND

LOST ALL ECONOMIC VALUE FROM GOVERNMENT

ACTION THEREBY GIVING RISE TO LUCAS TAKING .......... 9

COICT ROG on vvcccécccsdicctiéccsuceveviekddadcsvinieniaieteiiatieeei. 12

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TABLE OF AUTHORITIES

CASES

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)...................10

Armstrong v. United States, 364 U.S. 40 (1960)......... RENE AMO

Broadwater Farms Joint Venture v. United States,

TRS Eg CER CID ERS E Saami Ete BN Ario es ily gam aC RS So A a apne ee 7

Hage v. United States, 35 Fed. Cl. 147 (1996) ...... 7

Litton Indus. Prod.. Inc. v. Solid State Sys. Corp.,

Se i ae en ecabokeneweuases 10

Loretto v. Teleprompter Manhattan CATV Corp..,

i PSTN Rae Sue ep AEN ya hard bog hae )

Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) ........ i)

MacDonald, Sommer & Frates v. Yolo County,

SB RRR SURE LSA URE OUP ef ESO a 7

Mingus Constructors. Inc. v. United States,

812 F.2d 1387 (Fed. Cir. 1987).................005: go oe oes CY 10

Parkview Corp. v. Dept. of Army Corps Engineers,

ae Se RTT CER: PE UNy RED taki h ccuebeececvidencevepsckuseqectdouensan 7

Penn. Central Transp. Co. v. New York City, 483 U.S. 104 (1978)....9

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922) ................... )

United States v. Riverside Bayview Homes Inc..

474 U.S. 121 (1985)..... (ODER ES EPRI Tage MERON ae EOE ag 6

ill

Williamson County Reg’! Planning Comm'n v. Hamilton Bank,

S73 U.S. E72 CSRS) vidcccctiisississ (eked deeveacbuiyevesdos

Yuba Goldfields Inc. v. United States,

723 F.2d 884 (Fed. Cu

767 Third Avenue Associates v. United States,

30 Fed. Cl. 216 (1993)

767 Third Street Associates v. United States.

48 F.3d 1575 (Fed. Cir. 1995) .........

CONSTITUTIONAL PROVISIONS

U.S. Const. amend. V.

STATUTES

RCFC 56(c).

Fed. R. App. P

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OPINIONS AND ORDERS BELOW

The judgment of the United States Court of Appeals for the

Federal Circuit is located at Appendix (hereinafter “App.”) 1. The

opinion of the United States Court of Federal Claims is located at App. 3

and that court’s judgment is located at App. 2.

STATEMENT OF JURISDICTION

Petitioners (hereinafter “Robbins”) brought their claim for

taking against the United States in the United States Court of Federal

Claims pursuant to 28 U.S.C. § 1491. On February 20, 1998 the trial

court granted summary judgment in favor of the United States and

Robbins timely filed their notice of appeal to the United States Court of

Appeals for the Federal Circuit on April 17, 1998 pursuant to Fed. R.

App. P. 3. The United States Court of Appeals for the Federal Circuit

entered judgment on December 10, 1998. The jurisdiction of this Court

is invoked under 28 U.S.C. § 1254.

CONSTITUTIONAL PROVISIONS INVOLVED

The Fifth Amendment to the United States Constitution provides

in relevant part: “nor shall private property be taken for public use

without just compensation.”

STATEMENT OF THE CASE

This is a takings case wherein Robbins allege the United States

took Robbins’ sales contract of $351,000 or alternatively took Robbins’

land. After discovery was conducted, the trial court granted summary

judgment in favor of the United States, notwithstanding affidavits from

Robbins’ experts demonstrating that the property lost all economic value

and notwithstanding a claim by Robbins that it would have been

economically futile to apply for a permit.

The property at issue is 39 acres of gently rolling pasture

located in Paris, Tennessee. The property is bordered on the east and

west boundaries by the Smallwood and McGowan Creeks respectively.

Although situated between two creeks during the 22 years Robbins have

resided there they have never experienced significant problems with

flooding or excessive wetness. In fact, a considerable portion of the

property has been farmed for over 20 years. Much of the open land

consists of fescue fields that are harvested for hay annually.

Robbins selected the property with an eye towards securing their

financial future. Because the property fronted U.S. Route 79, a major

thoroughfare in Paris, the Robbins were confident that it would greatly

appreciate in value. This factor became all the more important in late

1984, when Mr. Robbins suffered an injury that rendered him disabled

and unable to work. Although the income from Mrs. Robbins’ dress

store was sufficient to support the family, because her husband was

unable to work the Robbins were keenly aware that their future

economic security was dependent upon the commercial value of their

land.

By the early 1980s it was evident to the Robbins that their nest

egg would at long last pay off. The area in which their property was

located was developing rapidly. Property along Route 79, near the

Robbins, was selling for tens of thousands of dollars per acre. For

example, 3.3 acres of naked land that borders the Robbins’ property sold

for $60,000 in November 1987. Then in April 1993 an additional six

acres sold beside the first three acres for $300,000. And in September

1993 the McKenzie Bank paid $200,000 for an acre located on the same

highway 1.6 miles away. By the mid 1990s most of the property

adjoining the Robbins had succumb to commercial development.

Peppers, an automobile dealership, was located on the land next to the

Robbins and Trollingers, a combination restaurant and butcher shop, was

located across the street.

In early March 1994 the Robbins thought that their plans for

future financial security would finally materialize. Joe Lipps, a local

4

realtor, called Ms. Robbins at her dress shop to inform her that he had

a buyer interested in her property. Mrs. Robbins stated she wotild

accept $8,000 per acre but was only interested in selling the property in

iis entirety. The buyer, Keith Baker, subsequently accompanied Mr.

Lipps and several others to view the Robbins’ property. Following an

examination of the property Mr. Baker made an offer of $325,000.

Mrs. Robbins eventually negotiated, through Mr. Lipps, a final sale

price of $351,000, or $9,000 per acre.

Mr. Baker intended on subdividing the Robbins’ property,

selling off the home and adjoining acres and developing the remainder.

He planned on leveling off the land adjacent to Route 79 and

constructing a mobile home sale center. He calculated that it would cost

no more than $50,000 to ready the property. It should be understood

that Mr. Baker is a very successful business man and in no way new to

the real estate game. At the time he offered to purchase the Robbins’

property he owned six mobile home facilities throughout the state of

Tennessee. He employs over 70 people and his gross receipts for each

of the last two years exceeded 33 million dollars. It was against this

backdrop that Mr. Baker selected the Robbins’ property. He justifiably

believed that the property had great potential because of its prime

location on Route 79.

Soon after the deal was negotiated, Mr. Lipps raised the issue of

wetlands on the Robbins’ property. Apparently, Mr. Lipps had made

inquires with the city concerning fill permits and was told that there

would not be a problem except that he may want to check if the

property's use was restricted by wetlands legislation. Mr. Lipps

conveyed this information to Mrs. Robbins. Initially, Mrs. Robbins

thoughi nothing of wetlands issues, after all, she had farmed the property

for the last 20 years and would have never considered her fertile pastures

to be lands that harbored aquatic life. Mrs. Robbins subsequently

contacted the City Business Manager who directed her to the Soil

Conservation Service. The Soil Conservation Service informed her that

since the property adjoining hers was prior converted wetlands that

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perhaps her’s was as well. Mrs. Robbins was then referred to the

Army Corps of Engineers.

On March 14, 1994 a representative of the Army Corps of

Engineers (hereinafter “COE”) showed up to inspect the Robbins’

property for wetlands. At the time, Paris, Tennessee was seven and a

half inches above normal rainfall. There was standing water on the

parcel of land that was being filled across the street and at various

locations on the Robbins’ property as well. After briefly examining the

property the field inspector declared that the Robbins owned a wetland.

Although the field inspector indicated that he relied on the “1987

Manuai” to make his determination, when Mrs. Robbins’ later

questioned him concerning the scientific basis for his findings, he replied

that he saw the mud on Mrs. Robbins’ shoes to determine hydrology.

The field inspector did provide Mrs. Robbins with what he

considered useful advice. He indicated to Mrs. Robbins that she need

not worry because based on his experience “she had the buyer over a

barrel.” He stated the buyer would either buy the property or lose his

$100,000 because she already had a contract. Mrs. Robbins informed

him “this is not the way she did business and that she does have to sleep

every night.”

On March 28, 1994 the COE notified the Robbins by letter of

their determination. The COE indicated the subject property was below

the headwaters in the McGowan Branch Watershed and that it contained

evidence of three characteristics of regulated wetlands on a large portion

of the property, including a majority of the highway frontage on State

Route 79. The COE advised Mrs. Robbins that she retain a qualified

wetlands expert to assist them in making a delineation of the property.

Thereafter, Mr. Lipps informed Mr. Baker the COE had

designated the Robbins’ property as wetlands. Mr. Baker then consulted

with his attorney and subsequently drafted a letter to Mr. Lipps

demanding the contract be nullified. Mr. Baker notified Mr. Lipps that

he was entitled, under ¢ 14 of the contract, to the return of the earnest

money held in escrow and a recission of the contract because although

the seller was aware of his intended use they failed to disclose the

existence of wetlands on the property and the need to obtain federal

permits prior to development of such lands. Paragraph 14 of the land

sales contact permitted recission in the event that the seller could not

transfer “merchantable title . . . which is acceptable to the buyer.”

Because the existence of wetlands on the subject property rendered such

land unfit for Mr. Baker’s intended purpose his nullification of the

contact seemed entirely appropriate.

Mrs. Robbins did not attempt to sue Mr. Baker for breach of

contract. Although she did not consult an attorney, she believed that

Mr. Baker was within his rights to cancel the land sales contract given

that the existence of wetlands, which was unbeknownst to either party,

rendered the property unsuitable for its intended purpose. Despite the

fact that she and her husband were dependent on the sale of their land

for their future economic security, Mrs. Robbins, out of a sense of

decency and fairness chose not sue on the contract.

Upon realizing what had transpired, Mrs. Robbins knew at once

that she had to act if she was to salvage her future economic security.

She wrote to the COE explaining that because of her husband’s disability

and the family’s limited resources she could not afford to pay $3,000 to

hire an independent consultant to perform the wetlands delineation.

Initially, the COE failed to respond to Mrs. Robbins’ request. After

contacting several officials in Washington, DC, as well as her state

representatives, the COE decided, in July 1994, to conduct a joint

wetlands delineation of the Robbins’ property with the State of

Tennessee, Department of Environmental Conservation (hereinafter

“DEC”).

The COE and DEC performed fieldwork on the Robbins’

property in August 1994, and issued the delineation report on October

12, 1994. The report indicated that 25 acres of the Robbins’ property

constituted regulated wetlands. The alleged wetlands were located in the

east end of the property near Smallwood Creek and to the west in the

area adjoining McGowan Creek.

In the interim, Mrs. Robbins felt that she had no choice but to

hire her own consultant. She retained a certified wetlands scientist, Dr.

Thomas Heinke, who conducted a field investigation of the Robbins’

property on July 27, 1994. Following his field investigation and a

review of the October 12, 1994 joint delineation report, Dr. Heinke

concluded that while the Robbins had wetlands on their property, the

extent of such wetlands was grossly exaggerated. Dr. Heinke concluded

that the fescue dominated portions of the site are not jurisdictional

wetlands.

The COE responded to Dr. Heinke’s objections by letter on

March 13, 1995. They remained steadfast in their belief that all the

areas designated were in fact jurisdictional wetlands. In July 1995 the

COE decided to re-evaluate the Robbins’ property. They conducted

another field investigation on December 13, 1995, finding that their

original designations were correct, that 25 acres of the Robbins’ 39 acre

farmland was jurisdictional wetlands.

REASONS FOR GRANTING THE WRIT

I. THE PETITION SHOULD BE GRANTED BECAUSE THE

TRIAL COURT’S OPINION CONFLICTS WITH THIS COURT’S

PRIOR RULINGS REGARDING RIPENESS

Generally, a claim that the “application of government

regulations constitutes a taking of private property is not ripe until the

government entity charged with implementing the regulations has

reached a final decision regarding the application of the regulations to

the property at issue.” Williamson County Reg’! Planning Comm'n v.

Hamilton Bank, 473 U.S. 172, 186 (1985). Thus, takings claims are

generally not cognizable until the requisite permit has been applied for

and denied. United States v. Riverside Bayview Homes Inc., 474 U.S.

121 (1985).

The trial court adopted the government’s position that because

the Robbins failed to apply for a Section 404 permit, their claim was not

ripe. This is erroneous because the Robbins never had any desire to fill

the wetlands and had no reason to apply for a permit. Robbins had a

contract for $351,000.00 to sell the land. They had no desire to develop

the land or make any commercial use of the property themselves.

Moreover, the cost of mitigation for a permit would greatly exceed the

$351,000.00 contract price.

Courts have recognized that exhaustion of administrative

remedies is not required in every instance. A landowner is not required

to engage in futile pro forma exercise of agency review when no

possibility exists that a permit will be granted. See e.g., MacDonald.

Sommer & Frates v. Yolo County, 477 U.S. 340, 350 n.7 (1985):

Broadwater Farms Joint Venture v. United States, 35 Fed. Cl. 232, 235

(1996). For example, in Parkview Corp. v. Dept. of Army Corps

Engineers, 490 F.Supp. 1278, 1282 (E.D. Wis. 1980), the court held

that the landowner was not required to exhaust its administrative

remedies because the COE’s district engineer had made clear that a §

404 permit would not be forthcoming. Similarly, in Broadwater Farms

Joint Venture v. United States, 35 Fed. Cl. 232, 235-37 (1996), the

court held that the plaintiff was not required to pursue a § 404 permit in

light of the fact that the Corps enforcement stance was equivalent to a

denial of a permit for any residential development in the lots designated

as wetlands. And in Hage v. United States, 35 Fed. Cl. 147, 164

(1996), the court held that it is not necessary to apply for a permit if the

process is so burdensome or futile that it effectively deprives the

property of value.

In the instance case it would be futile for Robbins to have

resorted to the § 404 permit process with respect to either of the

alternative takings claims. First, with regards to Robbins’ contract

claim, the § 404 permit process is inapplicable because the complained

of taking was consummated upon the designation of the subject property

as wetlands. Once the subject property was designated wetlands the

buyer rescinded the land sales contract. It was at this point that

Robbins’ takings claim ripened because no further agency action was

required in order to determine the precise nature and impact of the

regulatory interference. Designation of the subject property as wetlands

had the same affect as if the government physically appropriated the land

itself. An after the fact § 404 permit application would in no way serve

to clarify the extent to which the regulatory action interfered with

Robbins’ property rights. Because as noted, once the designation

occurred, the taking of the land sales contract was complete.

Resort to the § 404 permit process would also be futile with

respect to Robbins’ second takings theory. First, resort to the

application process on these facts would be unduly burdensome.

Robbins own 39 acres of land, 25 of which has been designated as

wetlands. Assuming, arguendo, that Robbins could even satisfy the

initial requirements for submitting a permit application (i.e., submission

of a development plan site) they would, because of their limited financial

means, be unable to satisfy the stringent mitigation requirements. Under

the present regulations, to receive a permit, landowners are required to

“donate” from one to three acres of non-wetland and turn it into a

wetland for each acre they are permitted to fill. The average is two

acres for each acre filled. Using the average two-for-one ratio, Robbins

would be required to “donate” 50 acres in order to receive a fill permit

for the twenty five acres designated as wetlands. At a conservative per

acre cost of $10,000, Robbins would be required to expend $500,000 to

comply with the permit process. Given the land sales contract price of

$351,000, it would be economically futile for Robbins to have to resort

to the § 404 permit process.

Il. THE PETITION SHOULD BE GRANTED BECAUSE THE

TRIAL COURT WAS PLAINLY WRONG IN FAILING TO

PROPERLY CONSIDER AFFIDAVITS OF REAL ESTATE

EXPERTS UNEQUIVOCALLY SHOWING ROBBINS’ LAND

LOST ALL ECONOMIC VALUE FROM GOVERNMENT

ACTION THEREBY GIVING RISE TO LUCAS TAKING

The Fifth Amendment of the United States Constitution provides

in relevant part: “nor shall private property be taken for public use

without just compensation.” U.S. Const. amend. V. This Court has

stated the “Fifth Amendment is intended to prevent the government from

forcing some people alone to bear public burdens which, in all fairness

and justice, should be borne by the public as a whole.” Penn. Central

Transp. Co. v. New York City, 483 U.S. 104, 123 (1978) (quoting

Armstrong v. United States, 364 U.S. 40, 49 (1960)).

It is well established that the government need not physically

appropriate the property at issue for a taking to occur. E.g., Lucas v.

South Carolina Coastal Council, 505 U.S. 1003, 1015-19 (1992).

Rather, a taking may also occur when the government by its actions

deprives an owner of all or most of its compensable interest in the

property. Id. As stated by Justice Holmes in Pennsylvania Coal Co. v.

Mahon, 260 U.S. 393, 415 (1922): “while property may be regulated to

a certain extent, if regulation goes too far it will be recognized as a

taking.”

To date, this Court has failed to articulate a “’set formula’ for

determining when justice and fairness require that economic injuries

caused by public action be compensated by the government.” Rather,

this Court has indicated that such determinations ultimately turn on the

facts of the individual case. Id.; Loretto v. Teleprompter Manhattan

CATV Corp., 458 U.S. 419, 426 (1982). In Penn Central Transp. this

Court did, however, identify three factors that have particular

significance in determining whether a regulation goes so far as to

constitute a compensable taking: (1) the economic impact of the

regulation on the claimant; (2) the extent to which the regulation has

interfered with distinct investment backed expectations; and (3) the

character of the government action. 438 U.S. at 124. See also, 767

Third Street Associates v. United States, 48 F.3d 1575, 1580 (Fed. Cir.

1995).

The United States Court of Appeals for the Federal Circuit has

1eld that because the question of whether a taking has occurred is

frequently fact-intensive, requiring the development of a complete record

through trial, there needs to “be an extraordinary set of facts in order”

to grant a motion for summary judgment in a takings case. Yuba

Goldfields Inc. v. United States, 723 F.2d 884, 887 (Fed. Cir. 1983).

Summary judgment is only appropriate when there are no genuine issues

of material fact and the moving party is entitled to judgment as a matter

of law. RCFC 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

248-49 (1986); Mingus Constructors, Inc. v. United States, 812 F.2d

1387, 1390 (Fed. Cir. 1987). In considering a motion for summary

judgment, the evidence must be viewed, and drawn, in the light most

favorable to the non-moving party. Litton Indus. Prod.. Inc. v. Solid

State Sys. Corp., 755 F.2d 158, 163 (Fed. Cir. 1985); 767 Third

Avenue Associates v. United States, 30 Fed. Cl. 216, 218 (1993).

As this Court made clear in Lucas, 505 U.S. at 1004, the

economic impact factor may be dispositive if the regulation deprives the

landowner of “all economically viable use” of the property. In 1975,

the Robbins purchased the property as an investment that they eventually

planned to sell in order to provide for their retirement. App. 4. Asa

result of the government’s wetland’s designation, all economically viable

use of the Robbins’ land is gone. This conclusion is reached by the real

estate experts and supported by affidavits. (See Affidavits of William

M. Johnson, A209, Samuel R. Striker, A211 and Harold Bass, Jr.,

A217.).

Mr. Johnson testified “[nJow that the Robbins’ property is

deemed a wetlands, the Robbins’ property has very little, if any,

economic value. Now that the Robbins’ property is deemed a wetlands,

the economic value of the property has been destroyed and it is highly

10

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unlikely that a buyer will make a reasonable offer on the Robbins’

property, if any offer at all.” Mr. Striker’s affidavit and Mr. Bass’

affidavit also state that the Robbins’ property has no economic value

because it has been deemed a wetland.

This testimony is more than sufficient to establish a Lucas

takings claim and withstand a summary judgment motion. In fact, the

trial court stated that “it is open to dispute what the fair market value of

the property was before and after the alleged taking occurred.” (App. 8,

footnote 6). Because this constitutes a dispute as to a material issue of

fact, summary judgment is precluded as a matter of law. The trial court

considered the affidavits (App. 11 n.5), but failed to view the affidavits

in a light most favorable to the Robbins.

The trial court held that “[a]ssuming, arguendo, that the

property's value did decrease, longstanding precedent nevertheless holds

that the mere ‘diminution in a property's value, however serious, is

insufficient to demonstrate a taking.’” (App. 11). This finding is

erroneous. It directly contradicts the affidavits of Robbins’ experts.

The trial court reached this finding based upon weighing the evidence,

not accepting Robbins’ evidence as true.

CONCLUSION

In a takings case, economic futility constitutes a legitimate

exception to the ripeness doctrine. Summary judgment was

inappropriately granted because the question of a taking is fact intensive,

requiring a complete record through trial, and only an “extraordinary set

of facts” justifies summary judgment. Such extraordinary facts do not

exists in this case to justify summary judgment for the government.

Questions of material fact exist regarding the loss of all economic viable

use of the Robbins’ property and whether government action was the

sole reason for the Robbins’ loss of the sales contract. Wherefore,

Robbins respectfully request that this petition be granted.

Dated: March 10, 1999. Respectfully submitted,

Corrected Date: May 1, 1999. Barry C. Hodge

Counsel of Record

Paul J. Harris

National Property Rights Center

11521-E Midlothian Turnpike

Richmond, VA 23235

(804) 378-1145

Attorneys for Petitioners

APPENDIX

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition is not

citable as precedent. It is a public record. The disposition will

appear in tables published periodically.

United States Court of Appeals for the Federal Circuit

98-5102

NANCY A. ROBBINS and EDWARD W. ROBBINS,

Plaintiffs-Appellants,

UNITED STATES,

Defendant-Appellee.

FILED

U.S. COURT OF APPEALS FOR

THE FEDERAL CIRCUIT

DEC 10 1998

Judgment JAN HORBALY

CLERK

ON APPEAL from the United States Court of Federal Claims

in CASE NO(S). 96-CV-779

This CAUSE having been heard and considered, it is

ORDERED and ADJUDGED:

Per Curiam (MICHEL, CLEVENGER and BRYSON, Circuit

Judges):

AFFIRMED. See Fed. Cir. R. 36.

ENTERED BY ORDER OF THE COURT

DATED DEC 10 1998 oy Jan Horbaly/BS

In the United States Court of Federal Claims

No. 96-779 L

NANCY A. AND EDWARD W. ROBBINS,

JUDGMENT

v. FILED FEB 24 1998

THE UNTIED STATES

Pursuant to the court’s published Opinion, filed February 20, 1998,

granting defendant's motion for summary judgment,

IT IS ORDERED AND ADJUDGED this date, pursuant to Rule 58,

that judgment is entered for defendant. No costs.

David A. Lampen

Clerk of Court

February 24, 1998 By: “s/ T. L. White”

Deputy Clerk

NOTE: As to appeal, 60 days from this date, see RCFC 72, re number

of copies and listing of all plaintiffs. Filing fee is $105.00.

In the United States Court of Federal Claims

No. 96-779L

(Filed February 20, 1998)

kkk kk kk KK KAAS ARA SAAR AAAA Eee

NANCY A. and EDWARD W * Takings; summary judgment; taking

ROBBINS, * by causing buyer to rescind land

Plaintiffs, * sales contract; Clean Water Act,

* Federal Water Pollution Control!

* Act Amendments of 1972, § 404,

as amended 33 U.S.C. § 1344

THE UNITED STATES * (1944); permitting process;

* ripeness

Defendant

Paul J. Harris, Richmond, VA, for plaintiffs

Pamela S. West, Washington, DC, with whom was Assistant

Attorney General Lois J. Shiffer, for defendant. Robert V. Smyth,

U.S. Army Corps of Engineers, Nashville, TN, of counsel!

OPINION

MILLI R. Judge

This case is before the court after argument on defendant's

motuon for summary judgment. The issue is whether the designation

and/or delineation of plaintiffs’ property as jurisdictional wetlands

resulting in the recision of a private contract to sell the property

constitutes a compensable taking under the Fifth Amendment.

FACTS

The following facts are undisputed, unless otherwise noted.

App. 3

Nancy A. and Edward W. Robbins ("plaintiffs"), own and reside on a

38.4-acre parcel of land in Paris, Tennessee (the “property"), which

supports a house, barn, shed, and machine shop. Plaintiffs purchased the

property in 1975 as an investment that they eventually planned to sell in

order to provide for their retirement.

On March 4, 1994, Keith Baker signed a land sales contract with

plaintiffs to purchase the property for $9,000.00 an acre, or

$351,000.00, and subsequently issued a check for a $100,000.00

deposit. Mr. Baker intended to sell the home and a portion of the

acreage and develop the remainder of the land as a mobile home sales

lot.

Shortly after the contract was signed, Mr. Baker's real estate

agent, Joe B. Lipps, learned from a Paris, TN city employee that the

property was in a floodplain and would require a permit for

development. Mr. Lipps was also informed that the property might be

wetlands. On March 7, 1994, plaintiffs contacted the U.S. Army Corps

of Engineers (the “Corps") and requested that it determine whether

regulated wetlands existed on the site; Car! Olsen, a representative from

the Corps inspected the site a week later. The Corps based its wetlands

determination on three environmental parameters: hydrophytic

vegetation, hydric soils, and hydrology, in accordance with the 1987

Corps of Engineers Wetland Delineation Manual. On March 28, 1994,

the Corps notified plaintiffs of its determination: The property contained

jurisdictional wetlands pursuant to section 404 of the Clean Water Act,

Federal Water Pollution Control Act Amendments of 1972, § 404, as

amended, 33 U.S.C. § 1344 (1994).1/ The Corps advised plaintiffs to

l/ Specifically, the determination stated that

[t]he Robbins family property, which is located below ‘headwaters’ in

the McGowan Branch watershed, reveals the presence or evidence of

three characteristics of regulated wetlands on a large portion of the

property including the majority of the highway frontage on SR 79

McGowan Branch and its adjacent wetlands are waters of the United

States pursuant to Section 404 of the Clean Water Act

App. 4

sb

retain a wetlands delineation expert and gave them information regarding

the permit application process under section 404 and the pertinent

regulation, 33 C.F.R. § 325 (1997).

In late March 1994, having been informed of the wetlands

determination, and after receiving several estimates for the cost of site

preparation and development, 2/ Mr. Baker demanded cancellation of

the contract and a return of his deposit because ‘the wetlands

determination made the land unsuitable for [his] use." Affidavit of Keith

Baker, Mar. 27, 1997, € 8. The parties dispute whether Mr. Baker or

plaintiffs canceled the contract and whether plaintiffs would have a cause

of action for breach of contract or specific performance in light of an

escape clause in the contract. Although this unresolved issue is not

particularly material to the takings issue, it does highlight the nature of

the land sale cancellation as a private action. The parties also dispute

whether the Corps knew of the land sale contract when it made its

wetlands determination and, if so, to what effect

In their April 1994 correspondence to the Corps, plaintiffs stated

that the land sale had fallen through and that they would not be seeking a

section 404 permit. Responding to plaintiffs’ letter dated May 5, 1994,

in which they stated that they could not afford to hire a wetlands expert

for the wetlands delineation, the Nashville division of the Corps and the

State of Tennessee Department of Environment and Conservation

performed a joint wetlands delineation and investigated the site in August

1994. The subsequent delineation report, dated October 21, 1994,

concluded that the approximately 39 acres of plaintiffs’ property

+

ae

contained "25 acres of regulated wetlands" in two noncontiguous areas

A wetlands delineation by a qualified consultam verified by our

Office 1s an acceptable procedure for determimuing the extent of proposed

activities in regulated wetlands

While the parties stipulate that Mr. Lipps provided these estimates, he

could not recall the details. The parties dispute the actual cost of developing the site.

given the permitting requirements Plaintiffs assert that defendant's estimate of

$189,456.00 is a “gross exaggeration of the actual costs of developing the property.°

App. 5

es hei ate

in the east and west of the property. Plaintiffs subsequently hired

Thomas Heineke, Ph.D., a Certified Wetlands Scientist, to conduct his

own field investigation. Dr. Heineke reviewed the delineation report and

provided written comments objecting to the extent of the wetlands on the

Robbins property, which he felt was “grossly exaggerated." Although

Dr. Heineke asserted that "the fescue dominated portions of the site are

not jurisdictional wetlands,” he did not specify how much of the

property did comprise wetlands, and plaintiffs do not challenge the

Corps' wetland designation in their complaint. 3/ The Corps responded

to Dr. Heineke's objections by letter dated March 13, 1995, encouraging

plaintiffs to submit a section 404 permit application to develop the

property and noting that the “disturbed nature of the regulated wetlands

on [the] property and the excellent on-site mitigation potential

[were] conducive to the preparation of an environmentally acceptable

and approveable development plan."

On December 13, 1995, the Headquarters of the Corps,

Waterways Experiment Station, re-evaluated the prior wetlands

delineation of the Corps Nashville District. The site investigation

focused on the disputed area of the fescue field on the West side of the

property. Plaintiffs’ experts, Dr. Heineke and Eugene Lampley, were

among those present during the investigation of the subject property. The

Corps issued a re-evaluation report on January 8, 1996, concluding that

the original wetland delineation report of October 12, 1994 was correct

and that 25 of the 39 acres of plaintiffs’ property comprised

jurisdictional wetlands.

At no point have plaintiffs submitted a section 404 permit

application to develop the wetlands. On December 12, 1996 plaintiffs

3/ Plainuffs note, however, that there remain "serious questions regarding the

extemt to which such designasion accurately reflects the existence of wetlands on the

subject property.” Plifs’ Br. filed Aug. 18, 1997, at | n.1. However, by pursuing a

takings claim, plaintiffs “must concede the validity of the Government action which is

the basis of the taking claim to bring suit under the Tucker Act.” Tabb Lakes. Ltd. v.

United States. 10 F.3d 796, 802 (Fed. Cir. 1993) (citing Florida Rock Indus.. Inc. v

United States. 791 F.2d 893, 899 (Fed. Cir. 1986)).

App. 6

L ‘ —_

filed their complaint in two counts to recover damages arising from the

Corps’ alleged taking of the land sale contract or, alternatively, the

taking of the property without just compensation in violation of the Fifth

Amendment.

DISCUSSION

|. Summary judgment standards

Summary judgment is appropriate when there are no genuine

issues Of material fact in dispute and the moving party is entitled to

judgment as a matter of law. RCFC 56(c). Summary judgment pursuant

to RCFC 56 properly can intercede and prevent trial if the movant can

demonstrate that trial would be useless in that additional evidence in

connection with its motion could not reasonably be expected to change

the result. See Pure Gold, Inc. v. Syntex (U.S.A.), Inc., 739 F.2d

624, 626 (Fed. Cir. 1984). In ruling on defendant's motion for summary

judgment, the court is mindful of the precedents admonishing against

"precipitous grants of summary judgment” in “fact-intensive” takings

cases. Yuba Goldfields, Inc. vy. United States, 723 F.2d 884, 887

(Fed. Cir. 1983). However, the court has scrutinized the record to

assure that no material facts are in dispute, that all presumptions and

inferences are drawn in plaintiffs’ favor and that defendant has

discharged its burden to establish entitlement to summary judgment as

both a matter of fact and law.

5

2. Takings issue

Analyzing a takings claims involves a ‘two-tiered" inquiry into

the governmental action resulting in a land use restriction. M & J Coal

Co. v. United States, 47 F.3d 1148, 1153-54 (Fed. Cir. 1995). First, a

court should assess the nature of the land owner’s private property

interest in order to determine whether a compensable interest exists. See

id. at 1154 (citing Lucas vy. South Carolina Coastal Council, 505 U.S.

1003, 1027 (1992)). Second, once the takings claimant has established

the existence of a property interest, the court must determine whether the

“

App

governmental action at issue constitutes a compensable taking of private

property for a public purpose. See M & J Coal, 47 F.3d at 1154. In

making this latter determination, the court must engage in "'essentially

ad hoc, factual inquiries."' MacDonald, Sommer & Frates v. County

of Yolo, 477 U.S. 340, 349 (1986) (quoting Kaiser Aetna v. United

States, 444 U.S. 164, 175 (1979)). This inquiry considers three central

factors: 1) the character of the government action or regulation; 2) the

economic impact of the government action on the property owner; and 3)

the extent of the interference with the owner's investment-backed

expectations. See Penn Central Transp. Co. v. New York City, 438

U.S. 104, 133 (1978); see also Kaiser Aetna, 444 U.S. at 175.

Although both plaintiffs and defendant employ this three-prong analysis,

they reach opposite conclusions.

ee eee

Wee) Hae

Plaintiffs argue that the Corps’ wetlands determination

constitutes a government action resulting in a compensable taking of the

land sale contract. In essence, plaintiffs assert that because the wetlands

determination indirectly led to the cancellation of the land sales contract,

the $351,000.00 in unrealized proceeds from the sale were "taken" and

thus require compensation. Yet at oral argument on defendant's motion

for summary judgment, plaintiffs’ counsel seemed to argue that it was

not the wetlands determination, rather, the wetlands delineation --

finding that 25 of 39 acres comprised wetlands -- that effectuated the

taking of the contract. 4/

4/ In the context of discussing the wetlands determination, plaintiffs’ counsel

then shifted his argument to the subsequent wetlands delineation:

But in our case what happened after that [the wetlands determination]

was the Government went beyond that. The Government then did a full-

blown determination [delineation?]. Something that is very unique. If we

would put on evidence, we would show that the Nashville office had

never done a full-blown delineation before.

. I am not asking the court to say that every time you have the

Government come out and make a determination it is a taking. We are

not asking for that. We are not trying to change the law. We are just

saying that under the unique set of facts of this case with that being the

App. 8

ee ee PTR ee eT PE ELS RO eRe EL RIEU CTOE Bel OL SA RR Se PR

The wetlands delineation occurred, however, five months after the

contract was rescinded. Thus, the issue is whether the wetlands

determination effectuated a taking of the land sale contract. Plaintiffs

alternatively contend that the wetlands determination and delineation

constituted a compensable taking of the property itself, because

defendant “has taken for public use substantially all beneficial and

productive use of [p]laintiffs' land." Compl. filed Dec. 12, 1996, 44 22-

26.

As a threshold issue, the parties dispute how the wetlands

designation and subsequent cancellation of the land sale contract should

be characterized -- as a government action or a private action. Plaintiffs

argue that, because the wetlands designation caused the cancellation of

the land sales contract, it is a government action that effectuated a

compensable taking. Defendant counters that the wetlands determination

merely provided the impetus for the parties to cancel a private contract;

ence, a private action, not a government action, is responsible for the

non-realized proceeds, which plaintiffs claim were “taken.”

That the parties dispute who actually canceled the contract --

plaintiffs or Mr., Baker, the buyer -- is immaterial. The fact remains

that in no manner did the Corps preclude the sale of plaintiffs’ property;

the parties to the contract, not the Corps, caused the contract to fall

though. Although the wetlands determination may have frustrated the

land sale contract, it 1s well-settled that government action that merely

frustrates expectations under a contract does not constitute a taking. See

767 Third Street Assoc. v. United States, 48 F.3d 1575, 1581 (Fed.

Cir. 1995) (citing Omnia Commercial Co. vy. United States, 261 U-S.

502, 510-11 (1923)): see also NL Industries, Inc. v. United States.

839 F.2d 1578, 1579 (Fed. Cir. 1988) (“[F]rustration of a business by

only obstacle to the sale going through, that under those set of

circumstances, it can be deemed a taking of the contract.

Transcript of Proceedings, Robbins v. United States, No. 96-779L, at 31-32 (Fed. Cl.

Oct. 27, 1997)

App. 9

niet

loss of a customer [is] not a taking.”); Kearney & Trecker Corp. v.

United States, 688 F.2d 780, 783 (Ct. Cl. 1982) (finding no taking

when the "[Glovemment did not appropriate any of the rights the

plaintiff had under the contract but only made it impossible for the

plaintiff to perform it").

For similar reasons, plaintiffs’ alternative argument regarding

the taking of the "commercial value" of the land also fails. The fact that

the wetlands determination may have prompted the recision of the land

sale contract, or precluded a future contract with a similarly attractive

price per acre, also is not material. The Corps has jurisdiction to issue a

permit to fill jurisdictional wetlands pursuant to section 404. See United

States v. Riverside Bayview Homes, Inc., 474 U S 121 126 (1985).

The wetlands designation itself cannot constitute a taking, as "it is quite

clear that the mere assertion of regulatory jurisdiction by a governmental

body does not constitute a taking.” Id. at 126 (citing Hodel v. Virginia

Surface Mining & Reclamation Ass'n, 452 U.S. 264, 293-97 (1981)).

The wetlands designation does not preclude the sale or development of

plaintiffs’ property; rather, it merely precludes development without a

permit. See Tabb Lakes, Ltd. v. United States, 10 F.3d 796, 800-01

(Fed. Cir. 1993). Indeed, the possibility that the Corps may grant

plaintiffs a permit precludes the wetland determination from constituting

a taking. See id. at 801 (citing Riverside Bayview, 474 U.S. at 127)

(The permit requirement "does not itself ‘take’ the property in any sense:

after all, the very existence of a permit system implies that permission

may be granted . .. ."). The requisite government action is often

supplied in takings cases when the Corps or other Government entity

declines to grant a permit to an applicant to use its land in a particular

way. That is not the case here, as plaintiffs have never applied for a

section 404 permit.

The second prong of the takings inquiry focuses on the economic

impact of the alleged government action, here the wetlands

determination. See Penn Central, 438 U.S. at 124; see also

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922). Plaintiffs

assert that by designating as wetlands 25 of the 39 acres of plaintiffs’

property, the Government "destroyed the commercial value of thie]

property." Pifs' Br. filed Aug. 18, 1997, at 15. The parties hotly dispute

the fair market value of the property at the time of the wetlands

designation. Plaintiffs argue that the fair market value was $351,000.00 -

- the value that Mr. Baker, the buyer, was willing to pay for the

App. 10

property. Defendant challenges this figure by pointing to the 1997 tax

appraisal of the property for $65,600.00 and arguing that, absent an

independent fair market value appraisal, 5/ one could not conclude that

the value of the property had actually declined.6/ Given the terrain and

hydrology of the property, defendant argues, the property's value is

probably far closer to the 1997 tax appraisal of $65,600.00 than the

contract price of $351,000.00. Once again, the disputed issue of the

amount to which the property's value diminished is not material, given

that the purported economic impact - the loss of the contract proceeds or

drop in the commercial value of the property -- was not caused by

government action, i.e., denial of a permit.

Assuming, arguendo, that the property's value did decrease,

long-standing precedent nevertheless holds that the mere "diminution in

a property's value, however serious, is insufficient to demonstrate a

taking." Concrete Pipe and Products of Ca. Inc. v. Construction

Laborers Pension Trust, 508 U.S. 602, 604 (1993) (citing Village of

Evelid v. Ambler Realty Co., 272 U.S. 365, 384, (1926))

(approximately 75% diminution in value due to zoning law). As the

Supreme Court noted in Lucas, 505 U.S. at 1004 the economic impact

factor may be dispositive if the regulation categorically deprives the

claimant of “all economically viable use" of the property. Plaintiffs

argue that the wetlands designation precludes them from maximizing the

potential profit from selling the property. An inability to maximize

profits, however, is insufficient to establish the deprivation of “all

5/ Plaintiffs have provided three virtually identical affidavits that purport to

demonstrate the fair market value of the property. The affidavits state that "the Robbins’

property was extremely marketable and the $351,000.00 sale price was certainly

reasonable.” Affidavit of William M. Johnson, Aug. 7, 1997, € 7; Affidavit of Samuel

R. Striker, Aug. 7, 1997, € 7; Affidavit of Harold Bass Jr., Aug. 8, 1997, ¢ 7. Only one

of the affiants is a certified appraiser, and none of the affidavits reflects an independent

appraisal of the fair market value of the property

6 As defendant notes, plaintiffs purchased the property in 1975 for

$36,000.00; in 1994 the appraised value of the property was $65,100.00, and in 1997 the

appraised value was $65,600.00. Although the value of the property as set by tax

appraisal is not equivalent to the fair market value. it is open to dispute what the fair

market value of the property was before and after the alleged taking occurred.

App. 11

economically beneficial or productive use" of the property, as required

for a compensable taking under Lucas. Id. But cf. Florida Rock

Indus.. Inc. v. United States, 18 F.3d 1560, 1570 (1994) (discussing

“balancing of competing values” “when a partial loss of economic use of

the property has crossed the line from a noncompensable ‘mere

diminution’ to a compensable ‘partial taking.’”)

The third factor of the takings inquiry is the extent to which the

government action interferes with plaintiffs’ reasonable investment-

backed expectations. Penn Central, 438 U.S. at 124; see also Keystone

Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 492 (1987).

Plaintiffs had originally purchased the property as an investment and

insist that the Corps’ wetlands determination and delineation interfered

with their reasonable investment-backed expectations. Because the

property “was not subject to frequent flooding or persistently wet

condition” and because neighboring property had sold for “sums that

greatly exceeded the canceled land sale contract price,” Plfs’ Br. filed

Aug. 18, 1997, at 21, plaintiffs argue that they reasonably could have

expected that their land would have the same value. They point to the

commercial development of the adjoining neighbor's property as further

evidence of the reasonableness of their expectations. However, that

these expectations were reasonable is unclear; they existed without the

knowledge that 25 of the 39 acres of the property, including acreage that

abutted the highway, comprised jurisdictional wetlands.

In Penn Central the Supreme Court rejected, as “quite simply

untenable" the argument that property owners "may establish a ‘taking’

simply by showing that they have been denied the ability to exploit a

property interest that they heretofore had believed was available for

development. . . ." 438 U.S. at 130; see also Deltona Corp. v. United

States, 228 Ct. Cl. 476, 491, 657 F.2d 1184, 1193 (1981) (finding that

denial of highest economic use of property "does not form a sufficient

predicate for a taking."). Plaintiffs’ taking claim unfortunately amounts

to little more and does not establish the requisite elements for a

compensable taking.

3. Ripeness of plaintiffs’ claims

The ripeness doctrine functions to prevent courts "from

entangling themselves in abstract disagreements over administrative

policies, and also to protect the agencies from judicial interference until

an administrative decision has been formalized and its effects felt in a

concrete way by the challenging parties." Abbott Labs. v. Gardner,

387 U.S. 136, 148-49 (1967). Defendant contends that this case is not

ripe because plaintiffs have not sought a permit under section 404 of the

Clean Water Act. Federal Water Pollution Control Act Amendments of

1972. § 404, as amended, 33 U.S.C. § 1344 (1994).

Plaintiffs acknowledge the general rule regarding the ripeness of

a takings claim: "[A] claim that the application of government

regulations effects a taking of a property interest is not ripe until the

government entity charged with implementing the regulations has

reached a final decision regarding the application of the regulations to

the property at issue." Williamson County Reg'l Planning Comm' n v.

Hamilton Bank, 473 U.S. 172, 186 (1985); see also MacDonald,

Sommer & Frates, 477 U.S. at 349. Only when a section 404 permit is

applied for, denied, and prevents "'economically viable’ use of the land

in question” can there be a taking. Riverside Bayview, 474 U.S. at 127.

To date plaintiffs have declined to seek a section 404 permit;

they assert that exhausting the section 404 permitting process would be

futile" for two reasons, and therefore is not required before they can

bring a takings claim. First, they argue that the taking occurred at the

time of the wetlands designation and the subsequent cancellation of the

land sale contract, so at that point the takings claims ripened. Therefore,

plaintiffs contend, "[a]n after the fact § 404 permit application would in

no way serve to clarity the extent to which the regulatory action

interfered with [p]laintiffs' property rights.” Plfs’ Br. filed Aug. 18,

1997, at 24. To the extent that the genesis of plaintiffs' takings claim

allegedly occurred at the time of the wetlands determination, the issue

presents a controversy ripe for review.

App. 13

;

Second, plaintiffs contend that the permit application process,

particularly the allegedly expensive mitigation requirements, would be

"unduly burdensome" and thus futile. Plfs' Br. filed Aug. 18, 1997, at

25. Although plaintiffs cite several cases to support the contention that

resorting to the section 404 permit process would be futile, they are

distinguishable. For example, in Broadwater Farms Joint Venture v.

United States, 35 Fed. Cl. 232, 235 (1996), plaintiff began

improvements to its property without a permit until the Corps ordered a

complete and immediate restoration of the property to its natural

wetlands condition. The court found that "[n]o reasonable landowner

would find a ‘door left open' for obtaining a permit [under] the

circumstances of this case" and that the "Corps would not allow

development." Id. at 237; see also MacDonald, Sommer & Frates, 477

U.S. at 352 (noting takings question in doubt because of the “possibility

that some development will be permitted"). The Corps has manifested an

apparent willingness in the instant case to work with plaintiffs to prepare

a development plan and to secure a section 404 permit. 7/

Keith Wade Whittinghill, the Corps Regulatory Project Manager in charge

of the wetlands determination of plaintiffs’ property, avers:

I explained the Corps of Engineers’ permit application process to Mrs.

Robbins in detail and I assured her that the Corps would gladly assist her

in any way should she decide to apply for a permit. I also informed Mrs.

Robbins that, while we could not guarantee what the final decision

would be on any permit application, she had a situation lending itself to

the preparation of a development plan which would be environmentally

acceptable and approveable by the Corps given the disturbed nature of

the wetlands on the property and the excellent on-site mitigation

potential.

Affidavit of Keith Wade Whittinghill, Sept. 9, 1997, € 3. Mrs. Robbins states that "Mr.

Whittinghill mentioned mitigation but never gave me specific information. Mr

Whittinghill made it clear on numerous occasions that there was no guarantee that a

permit would be issued for my property in the event that I did apply.” Affidavit of Nancy

A. Robbins, Oct. 3, 1997, ¢ 6. This is not akin to denying a permit application,

contrary to plaintiffs’ intimation during oral argument.

App. 14

Plaintiffs place greater emphasis on what they term an

"economic futility’ argument." Plfs' Br. filed Oct. 7, 1997, at 2.

Plaintiffs cite Hage v. United States, 35 Fed. Cl. 147, 164 (1996), for

the proposition that they need not exhaust the section 404 permitting

process if the procedure "is so burdensome that it effectively deprives

the property of value." Not only is Hage distinguishable, but this

quotation omits another factor involved in showing futility 8/ and does

not contemplate speculation as to the expense of the permitting process.

Plaintiffs assert that in order to "retain the commercial value of

the property" a permit must be sought to fill the entire 25 acres of

wetlands "to clear the taint of the wetlands designation on the entire

parcel." Plfs' Br. filed Oct. 7, 1997, at 34. Attempting to explain the

economic futility of on-site mitigation, plaintiffs present a conservative

hypothetical indicating that even assuming a one-to-one acre exchange,

9/ the cost of mitigation could exceed the land sale contract by

$11,000.00. Id. at 4. Plaintiffs’ hypotheticals aside, the cost of

determining and fulfilling an acceptable mitigation plan under the Corps'

mitigation guidelines is completely speculative. 10/ Without a section

8/ Hage cites two factors involved in a showing of futility: "[T]he law does

not require plaintiffs to apply for a permit if the procedure itself is not a reasonable

procedure, and is so burdensome that it effectively deprives the property of value.” 35

Fed. Cl. at 164 (citations omitted).

9/ The Corps’ mitigation policy under section 404 is set forth in the

Memorandum of Agreement Between the Environmental Protection Agency and the

Department of the Army Concerning the Determination of Mitigation Under the Clean

Water Act Section 404(b)(1) Guidelines (Feb. 7, 1990) (the "MOA"). In keeping with a

policy of no net loss of wetlands, the Corps will generally require that at least | acre of

wetlands be created for every | acre that is filled. However, the MOA also states that

"the ratio may be less than | to | for areas where the .. . likelihood of success

associated with the mitigation proposal is high.” MOA at 6.

10/ Under the plaintiffs’ hypothetical and a one-for-one acreage exchange,

plaintiffs would need to purchase eleven acres, so that when added to the 14 non-wetland

acres of their property, the resulting 25 acres equals the 25 acres of wetlands which will

be filled. The hypothetical, however assumes a purchase price of $10,000.00 per acre.

which may be inflated given that the Robbins’ land and buildings were to be sold for

App. 15

404 permit, one cannot know whether, as plaintiffs contend, the cost of

mitigation would be "economically impractical," or would, in fact, be

akin to a permit denial.

As the Federal Circuit recently expounded, “the futility

exception simply serves ‘to protect property owners from being required

to submit multiple applications when the manner in which the first

application was rejected makes it clear that no project will be

approved.’” Howard W. Heck, and Assocs., Inc. v. United States,

No. 97-5064, 1998 WL 23954, *3 (Fed. Cir. Jan. 23, 1998) (quoting

Southern Pac. Transp. Co. v. City of Los Angeles, 922 F.2d 498, 504

(9th Cir. 1990)). In the case at bar, plaintiffs have not demonstrated this

type of futility, and their speculative economic futility arguments enjoy

little legal support.

Therefore, plaintiffs’ takings claim -- pinning the taking to the

wetlands determination -- is ripe for review whereas a takings claim

based on a denial of a section 404 permit is obviously not ripe, but

would be in the future if plaintiffs apply for, and are denied, a section

404 permit.

While the court is sympathetic to plaintiffs' plight, it cannot

disregard existing precedents and invent new law. The wetlands

determination and delineation themselves are insufficient to constitute a

compensable taking, as they do not supply the requisite government

action required by Penn Central and its progeny. While it may be true

that the wetlands determination directly or indirectly caused the land sale

to fall through, this was a private, not a government action. Plaintiffs

may continue to use their property as they always have, but in order to

fill the wetlands they must seek a section 404 permit with the Corps. If,

however, the Corps denies plaintiffs a section 404 permit, a final action,

then plaintiffs have an entirely different case, for then they can

demonstrate the requisite government action. The Corps has expressed

its willingness to assist plaintiffs with the permitting process, and the

$9,000.00 an acre and they were in a commercially desirable location abutting a

highway.

App. 16

court has no reason to believe that such assistance will not be

forthcoming.

CONCLUSION

Accordingly, based on the foregoing, defendant's motion for

summary judgment is granted. The Clerk of the Court shall enter

judgment for defendant.

IT IS SO ORDERED.

No costs.

“s/ Christine O.C. Miller _

Christine Odell Cook Miller

Judge

App. 17